Indicted on seven counts of conspiracy, false statement and wire fraud in connection with their alleged participation in a New Jersey flipping scheme that involved falsified loan documents:
Barry Fauntleroy, aka Christopher B. Fauntleroy, 40, real estate investor formerly of Mendham, New Jersey who operated a business known as EON Institute, Inc., a real estate holding company and controlled a bank account in the name of Neighborhood Holdings, LLC.
Devon Bowie of Malverne, N.Y., mortgage banker, president of Neighborhood Mortgage Bankers Company, a HUD approved lender in Elmsford, New York. Bowie controlled a bank account in the name of Urban Renaissance.
The indictment also references numerous unindicted co-conspirators by initials including a loan processor, mortgage underwriter, two settlement agents, a real estate closing attorney and a contractor/real estate investor.
The indictment alleges that from June 1999 through July 2001, Fauntleroy, Bowie and the undicted co-conspirators conspired to fraudulent induce the FHA to insure loans made to unqualified buyers. Low-income purchasers would be solicited with promises that they could purchase homes with little to no money down. The conspirators would purchase dilapidated properties and show these to the prospective purchasers, promising that the properties would be renovated and improved. The agreed sales price was the asserted â€˜fair market valueâ€™ after renovation. The conspirators would assist borrowers in obtaining FHA insured loans through Neighborhood Mortgage Bankers Company by submitting and approving loan applications and packages containing false information including false bank statements, leases, W-2â€™s, VOMs, VOEs, attorney escrow letters, gift letters, deposit checks, pay stubs and appraisals. Settlement statements would misrepresent down payment monies and disbursements.
The properties would be purchased at a reduced price, often using the proceeds of the FHA loans, and resold to the borrowers at the inflated prices with little to no renovations actually having been done. High origination and discount fees were charged and proceeds were diverted to companies, individuals or accounts controlled by the conspirators. The indictment contains specific allegations as to eight properties located in Newark, Neptune, Irvington, East Orange and Hillside, New Jersey.
Previous Mortgage Fraud Blog Articles on this scheme: